Thread regarding State Farm Insurance layoffs

Reading these posts is mind numbing. Not a single person in here understands business strategy.

Gainsco focuses only on one market, non-standard auto. They do it very well and are profitable. SF doesn’t write non-standard auto and doesn’t have the expertise.

This, gainsco represents a way to expand into a new market. They have the expertise and operating model for something we don’t. Gainsco won’t compete against SF, it will complement it. Agents will have a new market to write to now, as well.

This isn’t about buying a traditional insurer or a fintech company. This was a strategic play.

Did not a single one of you read the email discussing all of this?

So if we become “free agents” in this new model, why would agents sell sf products? It used to be claims service.. gone. It used to be agents could advocate for their clients, oh I mean customers per compliance...gone. It used to be local agt service...gone with COVID. Any new model will hasten the loss of the leadership position helps for the last 70 years.

That some point coming soon get ready for the next evolution of the SF agent. It won’t be paying huge renewals most service will be unloaded on CCC. In the future income will be be driven by raw new production and auxiliary lines. Consistent Customer Experience will be the new model, 70% of agents just riding renewals now,not a game plan for making it in the future. Hope the new guys aren’t buying anything big, unless you are going to work your A– off.
Nothing ever remains the same especially in this environment. Good Luck to everyone.

@dpeq.....at some point, that might be true. But at this point, State Farm just isn’t providing the service unless agents do it. CCC is a cluster fork. Claims doesn’t call customers or respond to the customers’ calls. Underwriting and service “work transactions in the order in which they are received” although in more and more instances we can verify that they just “delete the more difficult transactions in the order in which they are received.” If State Farm ever successfully provides customer service, the agent renewal comp can drop. But for now, it ain’t getting served unless an agent does it or follows up on it.

Customers all want to save money. They go online and without a ton of knowledge select the lowest legal liability limit available. They run out get in an accident figure out they saved 20 bucks but they’re on the hook for another hundred K in out-of-pocket liability expenses. Then they come looking for somebody to sue because big bad state farm allowed them to buy too low of a limit, and their lawyer is sure it’s our fault. Welcome to reality. We could k–l all the id–ts and lawyers, but we wouldn’t have much of a client base left after that.

Agt don’t want to sell the other stuff because sf pays half of what other independent agents or brokers make for the same sale. Mortgage, annuities, , etc.

They don’t want to roll their phones to ccc because that dept is fraught with error prone representatives.

People still want to talk to other people. If they wrote direct, sf customers would still walk in or call in to an agt office. I’d be posies if I have to service the customer when I am not getting paid on them. You don’t like to work for free, nor do I..

Lastly, people need help.. most people doe t fully know how their insurance works and are I’ll-covered. People know or can find out how to invest for retirement or lose weight, but yet we have an obese society and virtually no savings. No one just walks in to buy life insurance; it’s sold not bought.

This company is not the same anymore. A few years ago they stated at a meeting they wanted to be more enterprise-centric, rather than agent-centric. Yet because of the missteps in mgmt, the agency force has been holding this sh–show together behind the scenes, while the company’s employee are so siloed that they have no clue.

Agt don’t want to sell the other stuff because sf pays half of what other independent agents or brokers make for the same sale. Mortgage, annuities, , etc.

They don’t want to roll their phones to ccc because that dept is fraught with error prone representatives.

People still want to talk to other people. If they wrote direct, sf customers would still walk in or call in to an agt office. I’d be posies if I have to service the customer when I am not getting paid on them. You don’t like to work for free, nor do I..

Lastly, people need help.. most people doe t fully know how their insurance works and are I’ll-covered. People know or can find out how to invest for retirement or lose weight, but yet we have an obese society and virtually no savings. No one just walks in to buy life insurance; it’s sold not bought.

This company is not the same anymore. A few years ago they stated at a meeting they wanted to be more enterprise-centric, rather than agent-centric. Yet because of the missteps in mgmt, the agency force has been holding this sh–show together behind the scenes, while the company’s employee are so siloed that they have no clue.

This gig with counting on renewals is going to die a slow death. If you thought it was to good of a deal when you started now wait til it stops. Good luck to everyone. I’m not an id–t but my SL pushing mortgage loan, mutual funds and US Bank

Why should customers pay for an agent? If technology provides the service function why have the cost of an agent. Agents should be comped for new business that they produce, not what is handed to them. Corporate spends millions each year providing leads to agents with a huge amount not even contacted. Look for corporate to step in and follow up and sell direct. IE.. new gig for CC or outsourced contact management firm. Gotta grow or gotta go.

You better be looking at all these income channels to generate revenue Gainsco, US Bank, Quicken Med Sup, Mutual Funds, NFIP, State assigned risk.
You think this deal is going to continue at the same Commission Structure you are nuts. It’s going to
change quick running an agency with a 30-40% lapse cancel is death. I talked to an an agent today said he was never going to retire, he mayn’t have that option customers are signing up by price most never talk to there agent or team anymore. Wake up CMXI the traditional insurance system I.e. processing payments and a few changes a day is toast. SF isn’t pushing all these additional income channels for nothing they are telling us the vision and regular renewal compensation isn’t part of the deal. Good luck

They thought redlining and insurance and credit scoring pricing and making the lowest in society pay big time would retain and attract the top of the lime “good” policyholders and make agent lives easy. Sick company really. And unAmerican

Agents could make the. IMO any money and Look good . Their “system” have undermined the business.

It’s a shame Real Consumers See it.

Agent here. Also former Claim Rep and Underwriter. Under the agency model, we cannot get those customers. Example. I have a guy today who went online to get a quote. I updated it with the available discounts and sent it out. Prospect has emailed me SIX TIMES today with questions. Only wants minimum required liability. Here’s the thing. It costs me (not State Farm) about $125/hr to be communicating with this prospect. At the premium he wants to pay, it will take me 7 yrs of renewals to recoup my acquisition cost...assuming I never spend another second on him. And the reality is he’ll be shopping tomorrow.
For those of you who don’t understand, State Farm is expecting agents to incur debt to acquire policy growth for State Farm. State Farm gets numbers of low premium, high lapsing policies. Agents go bankrupt providing them. And there’s no hope of ever recouping that money. THAT is why agents won’t write this stuff, and why SF has to try internet acquisition.

Tipster is terrified of losing number one before 100 year anniversary.

They want the policy count to maintain teir #1 position. Expanding Hi Roads to market directly to get those policies.

Love this. Hope we buy a fintech provider as well that can also bring in a Top set of IT leadership in the digital space.

Mets P&C business would be a great acquisition for SF.

Allstate is buying national general. MetLife is selling their property and casualty business. Those are big splashes. Gainsco was sold for less than a lot of sales territories produce in a year.

What’s so great? They do something within our industry that we don’t know how to do. They do it in ways we haven’t traditionally done. They’re innovative and successfully making money at it. They are a nimble sailboat that maneuvers well in a tight space where our giant, super powerful aircraft carrier is inefficient.
Basically, they are something we need, and they were for sale. Any other stupid questions?

4mod - Ok Smarty Pants. What is so special about GAINSCO?

Why wouldn’t they buy GAINSCO?

They are doing this to compete with Allstate, they just announced buying National General with is also non-standard, I do believe Farmers and American Family have non-standard companies in their business as well.

Probably a good move. Getting into a market we just haven’t ever done...by acquiring a company that actually makes money doing it.
As for the ignorant comment about agents getting off their duff.....agents have always quoted these people. Then they print the letter that says “ineligible” and look for the next person to quote.

The better move would have been to acquire a tech company or insure tech company, rather than expand within the traditional insurance business model. Expanding lines of insurance, all for it, but on a traditional antiquated business model, not the best idea.

This is what we should have done with the bank and with investments, buy an established operation and eventually rebrand it. It is about time we stopped trying to reinvent the wheel thiking we can do it better.

Guy below..
You’re a mo–n. We don’t do nonstandard.. so it is not about getting off our duff to sell it. This is a learning experience.. one, to leRn about pricing and servicing nonstandard, and two, to go slow in gaining experience in the acquisition space since this is the freaking first one in our history. More to come I am sure.

For those at home, nonstandard is the below average risk business. Somebody gotta write it.

Hummm... the only way to grow business is to buy it . Can’t get agents off their duff to sell it and can’t price it so leveraging gains in the market to acquire it.

Learning opportunity. SF has not pursued non-standard auto business in their past. Also, chance to examine MGA and independent agent operation up close. All the while keeping it separate from primary business. Not a bad exercise.

Low coverage limit substandard risk can be a very profitable segment. Having said that I am sure we will find a way to screw it up. Now Thant the bank is gone we have to have some black hole to dump money down.